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In business, organic growth "comes down to product-market fit," says longtime software industry veteran and CEO Dave Sikora.

Not a phrase you're familiar with? Let's clarify what it means before we talk about how to achieve it.

The phrase "product-market fit," defined as "being in a good market with a product that can satisfy that market," was coined by Andreessen Horowitz co-founder Marc Andreessen in a 2007 blog post.

The concept is often applied to startups and early-stage companies, but it is relevant for any company bringing new solutions to market or pursuing new markets—key areas of focus for organic growth.

How to Work the Product-Market Fit Equation

Solving the product-market fit equation requires you to know why customers would want and use your product and how you are going to attract those customers to your product. Classic Marketing—with a capital "M."

When working with that equation, Marketing needs to excel at five capabilities.

1. Understanding the Needs and Wants of the Market and Customers

I remember a mentor years ago telling me, "It is better to be an aspirin than a vitamin." Aim to solve headaches and know which headaches go with which market segments.

Knowing requires conducting formal and informal research.

Research starts with a hypothesis. What's yours? Collect data: Talk with prospects; attend industry events; and read, read, and read some more (industry articles, analyst reports, experts' blogs, etc.).

We live in a dynamic world, and needs change. For example, Kodak never evolved to embrace digital photography. Blockbuster (and all video rental stores) couldn't compete with on-demand options such as Netflix. More recently, the Toys "R" Us stores are closing because they couldn't compete with online and big box stores.

Your research needs to be ongoing so you can zig and zag with the market. That's the only way to avoid the fate of those failed brands.

2. Gathering and Validating the Market Requirements so Your Solutions, Features, and Benefits Resonate With Buyers

Again, you'll need to conduct formal and informal research. What is the minimal feature set your offer needs to ease the headache? Consider employing a new product development (NPD) process, such as the stage-gate process, as part of this step.

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How to Use Product-Market Fit to Drive Business Growth

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ABOUT THE AUTHOR

image of Laura Patterson

Laura Patterson is the president of VisionEdge Marketing. A pioneer in Marketing Performance Management, Laura has published four books and she has been recognized for her thought leadership, winning numerous industry awards.